An E&E Special Report

KEYSTONE XL:

Alberta leader makes pitch for pipeline during Washington visit

Jean Chemnick and Jessica Estepa, E&E reporter

E&E Daily: Wednesday, April 10, 2013

Any environmental risk posed by the controversial Keystone XL oil pipeline would pale in comparison with its job-creation and economic benefits and its boost to North American energy independence, Alberta's top official told a Washington, D.C., audience yesterday.

Alberta Premier Alison Redford is in town taking meetings on Capitol Hill and with Obama administration officials ahead of the administration's likely decision this spring or summer on whether to grant TransCanada Corp. a permit to build the Alberta-to-Texas pipeline. Although she said she was not lobbying for the pipeline, Redford called it "important" and hinted that if the United States nixes the project, the administration would need to find a way to mend fences with its neighbor to the north.

"If this wasn't to proceed, I think a lot of people would be wondering what else we should do in order to strengthen the relationship," she said at the event hosted by the Brookings Institution.

Redford's visit coincides with efforts by House Energy and Commerce Committee Republicans to pass legislation that would mandate that TransCanada receive a permit. The Energy and Power Subcommittee will hold a hearing on the measure today.

The project has become bitterly divisive, as interruptions by four protesters at yesterday's event illustrated. One woman accused Redford of selling out "life on this planet" and called for subsidies for renewable energy instead.

Opponents have said the pipeline would boost atmospheric greenhouse gas emissions and increase the likelihood of a spill, but Redford said it would not present any risk to the environment that is not also posed by other fossil fuel sources.

"Energy does come with an environmental cost, since its production and its use generate greenhouse gases that affect the climate," she said. But she added that Canadian oil sands currently make up less than two-tenths of 1 percent of the globe's greenhouse gas emissions.

Redford also waved away environmentalists' warnings that Keystone XL could lead to massive oil spills, like the one that occurred when a pipeline in Arkansas ruptured earlier this month, flooding a suburban neighborhood with oil (EnergyWire, April 2).

"These are very isolated incidents, and they don't happen as often as people might suggest that they could," she said. Product transported by rail or barge, instead of by pipeline, poses a higher risk of spill and creates more emissions from transportation, she added.

Redford said there was little doubt that the product would make it to market, with or without Keystone XL.

"We are an exporting economy," she said. "We know that we can get our product to tidewater. We know that we can sell to customers around the world."

Other pipelines have been proposed, including Enbridge's Northern Gateway pipeline, which would move oil from Alberta to Kitimat on the coast of British Columbia. Keystone opponents say that project is not as far along in the permitting process as TransCanada's pipeline, and that British Columbia officials would be unlikely to approve it. But Redford said those dynamics had changed in the past year, as provincial legislators have seen how strenuously Alberta has been regulating its oil sands industry.

Balanced against the potential environmental costs, Redford said, are 75,000 jobs that would be created directly or indirectly if the pipeline goes forward.

Environmentalists note that in its draft supplemental environmental impact statement, the State Department estimated that the project would create 35 jobs to operate it. Daniel Weiss of the Center for American Progress Action Fund noted in an op-ed in National Journal that this was "fewer positions than on a National Football League roster."

But Redford said that did not account for those employed in the construction of the pipeline, or for the benefits of moving the product to refineries in the United States. She added that some of the investors in the pipeline would also be U.S. companies.

"We look at this in a much broader context, in the energy relationship that Canada has with the United States," said Alberta's international and intergovernmental relations minister, Cal Dallas, who accompanied Redford. He noted that some U.S. oil production would also move through the pipeline, meaning that production jobs might also be supported by it.

The officials were adamant that oil sands production would not be impeded if the pipeline were not approved, because product would move via rail and other means. But Redford said she did foresee that rail jobs would be lost if the pipeline were built.

But the Pembina Institute, an environmental think tank based in Canada, has estimated that nixing the pipeline would prevent oil sands development from expanding as rapidly as it otherwise would. The industry plans to increase production from the current 1.8 million barrels a day to 5.2 million by 2030.

"If built, Keystone XL will be a key driver for oilsands growth," said the think tank in a recent report.

Even if the other transportation options Redford referenced are built, Pembina said, Keystone will encourage oil sands to develop still further, increasing greenhouse gas emissions.

Rejecting the proposal "would send a clear signal to oilsands producers, the Canadian government and financial markets that the current high carbon content of oilsands has become a liability for future oilsands growth and the long-term competitiveness of the U.S. economy," the report said.

But Redford said the United States could make bigger strides in combating climate change by following Alberta's lead in adopting a price on carbon emissions, supporting carbon capture and storage, or encouraging the use of mass transit.

Keystone should not be a surrogate for climate action, she said. "I don't think that one particular project needs to symbolize the whole piece. It's a complicated business."

Redford touted her own province's efforts to rein in greenhouse gas emissions through regulation and a carbon tax.

"Alberta is home to some of the most environmentally friendly, progressive legislation in the world, and you wouldn't know that from the clamor of the debate," she said.

Environmentalists have countered that the Alberta carbon tax, which levies a $15 per ton tax on large emitters only, in actuality costs companies about $1.8 per ton to comply, making it too weak to create an incentive for oil sands developers to curb their emissions. Alberta's government is considering legislation that would increase the tax, however.

House markup next week

Meanwhile, on Capitol Hill, Rep. Lee Terry (R-Neb.) told reporters at a briefing yesterday that he expects both the Subcommittee on Energy and Power and the full House Energy and Commerce Committee next week to mark up his bill, H.R. 3, which would provide TransCanada with its permit to build Keystone.

No date has been announced for when the bill will hit the House floor. But leaders have indicated that they want to vote on the bill before Memorial Day (Greenwire, March 15). The vote could come at any time, Terry said.

The bill, which has garnered 91 bipartisan co-sponsors, is similar to versions that passed multiple times in the last session. With the Republican-led House and 62 senators on the record supporting the project, Terry said he believed the bill could be passed by both chambers and sent to President Obama.

"I feel a lot better about Congress' ability to drive this to the finish line," he said. "My confidence grew with the Senate votes. ... When [Sen. John] Hoeven [R-N.D.] and I talked earlier, we knew we had numbers as close as 58. But getting to 62 really broke through a barrier."

But Democratic leaders in the Senate are unlikely to bring such legislation to the floor.

At today's House hearing, Democrats are likely to bring up the recent Arkansas pipeline rupture. Terry, who noted that only one constituent had asked about the spill while he was home for congressional recess, said Republicans plan to emphasize the need for modern pipelines -- something that President Obama did during his State of the Union address.

"Arkansas was anything but a modern pipeline," he said. "That was built in in the early 1940s. Now, the Keystone pipeline is the new standard of pipelines, so this is the most modern pipeline."